Citing court documents it had obtained from the Nova Scotia Supreme Court, CoinDesk notes that “there were roughly 115,000 users with balances signed up on the exchange, with $70 million CAD in fiat and $180 million CAD in crypto owed overall,” as of Jan. 31. Gerald Cotten, founder and CEO of QuadrigaCX, died of complications from Crohn’s disease while traveling through India last December.

Jennifer Robertson, identified in court filings as Cotten’s widow, said Cotten had “‘sole responsibility for handling the funds and coins,’ and the remaining team members have had no luck accessing the exchange’s cold wallets since,” CoinDesk reported.

On Tuesday, QuadrigaCX was granted a 30-day stay by a judge in the Supreme Court of Nova Scotia. Robertson wrote in a court filing that it “urgently needs a stay of proceedings which will allow Quadriga and its contractors additional time to find whatever stores of cryptocurrency may be available and also to negotiate the bank drafts available to Quadriga,” hoping to stave off any investor lawsuits, which Robertson said could cause its investors to “suffer further damages.”

However, a report in the Wall Street Journal is now calling the crypto exchange’s story into question.

Some cryptocurrency specialists aren’t waiting for Quadriga to figure things out. James Edwards, a cryptocurrency analyst who publishes research on a website called Zerononcense, said he reviewed the exchange’s claims based on an examination of publicly available transaction histories.

He says he found no evidence that Quadriga controlled any wallets that held the large amounts the company claims. “It appears that there are no identifiable cold wallet reserves for QuadrigaCX,” he wrote in a report. Quadriga didn’t respond to a request for comment.

According to Edwards’ analysis – which mostly tracked Quadriga’s bitcoin holdings – most of the funds had been transferred to other exchanges such as ShapeShift, Bitfinex and Poloniex. The latter told the Journal that it “identified accounts that could be related to Quadriga, and is working with appropriate authorities,” while the other two either declined to comment or had yet to comment.

Although his analysis remains inconclusive, Edwards “couldn’t find any transactions going to the kinds of reserve accounts Quadriga says it has” because “at some point transactions either to or from the active accounts should have appeared.”

This is a weird story that has just gotten weirder. And it’s starting to seem more and more likely that the courts will eventually decide how it ends.

Photo: Getty iStock

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